Press release

CMS issues proposed additional rule to address risk adjustment program for the 2018 benefit year

CMS issues proposed additional rule to address risk adjustment program for the 2018 benefit year
Proposed rule seeks to provide certainty and sustain consumer choices and affordability

Today’s notice of proposed rulemaking, “Patient Protection and Affordable Care Act; Methodology for the HHS-operated Permanent Risk Adjustment Program for 2018 Proposed Rule,” proposes to adopt the risk adjustment methodology that HHS previously established for the 2018 benefit year which uses the statewide average premium in the payment transfer formula.

“Today’s proposed rule continues our effort to help stabilize the individual and small group markets,” said CMS Administrator Seema Verma. “Our goal has been, and will continue to be, to stabilize the market and provide American consumers with more affordable health coverage options.” 

On February 28, 2018, the United States District Court for the District of New Mexico issued a decision vacating the use of statewide average premium in the HHS-operated risk adjustment methodology for the 2014 – 2018 benefit years. The government requested the court reconsider its decision and is currently awaiting the court’s ruling.

This proposed rule further explains the justification for utilizing statewide average premium in the calculation of risk adjustment transfers, and expands on the reasoning behind operating the HHS-operated risk adjustment program in a budget-neutral manner. CMS seeks comment on the proposal to use statewide average premium in the risk adjustment methodology for the 2018 benefit year.

Previously, CMS issued a final rule which adopted the risk adjustment methodology that CMS formerly established for transfers related to the 2017 benefit year, so that HHS could continue operation of the program to maintain stability and predictability in the individual and small group health insurance markets.  However, the rule only allows for the program to continue for the 2017 benefit year.  The rule proposed today would allow the program to continue for the 2018 benefit year.